Pandora Drops Its 40-Hour Free Listening Limit

August 23, 2013 at 3:59 AM (PT)

YESTERDAY (NET NEWS, 8/22) PANDORA saw its Q2 revenue increase 58% year-over-year to $162 million, which enabled it to cut its loss for the quarter to $7.8 million. -- a marked improvement over Q1's loss of around $20 million. The webcaster also announced a change that will affect listeners in advance of the launch of iTUNES RADIO, expected from APPLE next month.

PANDORA will lift the 40-hour-per-month limit the company has had in place on free listening since MARCH of this year.

Founder and Chief Strategy Officer TIM WESTERGREN wrote in the company blog at the end of FEBRUARY (NET NEWS 2/28), "This week we will begin communicating directly with a small number of our listeners as we introduce a 40-hour-per-month limit on free mobile listening. Most of you reading this will never hit the limit. In fact, it will affect less than 4% of our total monthly active listeners. For perspective, the average listener spends approximately 20 hours listening to PANDORA across all devices in any given month"

YESTERDAY, CFO MIKE HERRING undid that policy, saying "Our investment in advertising infrastructure and implementing smart levers such as reducing song skipping and limiting mobile listening have helped us drive monetization and manage content costs, as reflected by the increase in RPM and a decrease in content costs as a percentage of revenue. When we introduced the 40 hour mobile listening limit, we were confident that our scale -- over seven percent of total radio listening and PANDORA's number one ranking in most major markets -- would allow us to take this action without impacting our key monetization initiatives in driving the disruption of the radio advertising market and driving our mobile advertising leadership."

"We're pleased to once again maximize free listening for everyone on PANDORA," said WESTERGREN. "The more than 70 million listeners that tune in every month will now have more time to hear the music they love, and thousands of working artists will reach more fans."